Canadian Dollar Update November 15, 2019 – Canadian Dollar trading sideways
USD/CAD Open: 1.3247-1.3248 Overnight Range: 1.3219-1.3252
Oil is at $57.18 and gold is at $1,467.20. US markets are higher today.
The short-term USD/CAD technicals are neutral-bearish. For today, USD resistance is at 1.3257. Support is at 1.3211.
The Canadian dollar is trading sideways. Traders are confused, markets are directionless, and they are looking for guidance. It is hard to find. The on-going US/China trade war and negotiations have unsettled traders. Prices of the so-called risk assets rise whenever there are rumours of a pending trade deal and reverse when the news isn’t forthcoming. That sentiment was on display overnight.
White House Economic Advisor Larry Kudlow said China and the US were closing in on a deal. That was music to the ears of commodity currency bulls. The Australian, New Zealand and Canadian dollars rallied in Asia but unwound the move in Europe. Traders there dismissed Kudlow’s comments and focused on a Financial Times article claiming US and China negotiators were struggling to finalize a deal.
Fed Chair Jerome Powell gave the US dollar a modicum of support during his Congressional testimony on Wednesday and Thursday. He described the US economy as “being in a good place” which meant that further interest rate reductions were not needed. That was the same conclusion the Reserve Bank of New Zealand came to on Wednesday when they surprised markets and left their benchmark Overnight Cash Rate (OCR) unchanged. The Bank of Canada reached that conclusion a while ago.
Oil prices are trading with a negative bias. West Texas Intermediate (WTI) dropped from $57.78. Tuesday to $56.46 overnight. Prices were weighed down by rising US crude inventories and concerns about slowing demand. The International Energy Administration said that non-OPEC production would increase substantially in 2020 while oil demand would fall.
The Canadian dollar direction is tied to broad US dollar sentiment, more so than usual as there is a dearth of domestic economic data. Traders are awaiting today’s US Retail Sales data. The headline number is expected to rise 0.2% compared to September’s 0.3% drop.
Today’s Suggested Range USD/CAD: 1.3200 – 1.3300
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By KBFX | November 15, 2019 | Daily Update | 0 comments